Eastern Neighborhoods Community Plans

San Francisco, USA

Through zoning and land-use regulation, this program fosters balanced development of affordable housing and light-industries

For the last 10 to 15 years, much of San Francisco's industrially-zoned land (approximately 1/3 of the City’s total land area) has been changing and has seen growing land use conflicts, where residential and office development began to compete with industrial uses. The four Eastern Neighborhoods of San Francisco were historically industrial and low income areas. In the mid to late 1990’s the booming economy in San Francisco brought an influx of young people causing a 30% increase in rent, housing shortages, and gentrification in the south eastern neighborhoods.

The main challenge of the Eastern Neighborhoods Community Program (ENCP) is to arbitrate between competing interests for land use and to find an optimal balance between housing and industry development in the area. Through a new zoning, giving more land opportunities to (affordable) housing development and at the same time guaranteeing the possibility for light-industrial expansion, the plan aims at creating socially and functionally mixed neighborhoods. Furthermore, new regulations relative to land-use, forming a constraint / incentive system for investors, aim at achieving the plan’s objectives. Because of the strong involvement of stakeholders during the all process, the plan serves as a good practice example.

Background and objectives

San Francisco’s four Eastern neighborhoods (Mission, Showplace Square/Portero Hill, East SoMa, and the Central Waterfront) represent 7% of the city’s total area. Most industrial activities there refer to what is known as “light-industries”, that is to say production, distribution and repair activities (PDR). These jobs largely contribute to respond to inhabitant’s daily needs and also serve other economic sectors. Moreover, almost half of low-qualified citizens in San Francisco work in these activities. So they represent a cornerstone in the economy and play a determinant role for social cohesion in the Eastern neighborhoods.

Despite all that, the amount of these jobs decreased in the last fifteen years, mostly due to competition for land. The rent is actually higher for investor if they invest in office activities and high-quality housing units as in PDR activities. Until then, investments for housing were not enough oriented toward affordable housing, so that only 10% of households in the city pay less than 30% of their revenues for housing.

So the Eastern Neighborhoods Community Program aims at reorienting the development of these neighborhoods, in order to better respond citizen’s needs and to achieve a better balance between land-uses. It was prepared during 10 years and proposes a vision for territorial development for the next 20 years. This is a global approach to urban planning, encompassing among others the development of housing, transportation, industries and community facilities. The ENCP strives to benefit all actors concerned by the neighborhoods’ development, from inhabitants to politicians, including land owners.

The Plan’s key strategies developed by the SF Planning Department can be summarized as follow:

Create more area for housing, in order to facilitate the construction of 7,500 new housing units during the Plan’s timeframe (with priority to affordable housing)

Strengthen industrial areas

Tweak rules to support urban living

Create “complete neighborhoods”

Expedite the process

Implementation

The Eastern Neighborhoods community planning process began in 2001 with the goal of developing new zoning controls for the industrial portions of these neighborhoods. A series of workshops were conducted in each area where stakeholders articulated goals for their neighborhood, considered how new land use regulations (zoning) might promote these goals, and created several rezoning options representing variations on the amount of industrial land to retain for employment and business activity. In February 2004, the Planning Commission established interim policies for East SoMa, the Mission, and Showplace Square/Potrero Hill to be in effect until permanent zoning is established. Starting in 2005, the community planning process expanded to address other issues critical to these communities including affordable housing, transportation, parks and open space, urban design, and community facilities. The Planning Department began working with the neighborhood stakeholders to create Area Plans for each neighborhood to articulate a vision for the future.

The department conducted an extensive outreach program, including several large workshops in each of the neighborhoods, hundreds of smaller meetings and discussions with community groups and individuals, over 15 planning commission hearings, office hours in the neighborhoods, surveys and focus groups with owners of PDR businesses, and a citywide summit on industrial land. Draft Eastern Neighborhood Area Plans were released in December 2007 for public comment. In April 2008, the Planning Commission voted to initiate the adoption process for the Area Plans. In 2008, a series of adoption hearings were held to evaluate the Plans before they were formally adopted and became part of the City's General Plan. As part of this, an extensive public benefits program (including strong affordable housing components) and a commensurate zoning package were also adopted.

The plan entered into force in December 2008; overall the new zoning reduces the part of available land allocated to industries and at the same time increases opportunities for the construction of new housing units. The aim is to counteract current specialization tendencies, to relax the housing market and diversify available housing, as well as to maintain PDR business activities in the Eastern Neighborhoods. The remaining land zoned for industries will be protected, in order to guarantee its availability for that purpose in the future. So the plan increases housing development possibilities without endangering economic development in the Eastern neighborhoods.

Parallel to that, the city planning administration made new regulations enter into force, coinciding and reinforcing the plan’s objectives. These regulations correspond to a constraints and incentives system directed toward investors. First, 15% of new buildings have to be rent or sold at affordable rents/prices. The rate reaches 18% in the case of housing development on former industrial land. Second, if investors include social housing in their program, they obtain density bonuses and thus can increase their return on investment by building higher houses and reducing unitary costs. Moreover, the plan deletes parking minimums that increase building costs for housing units.

The concept “affordable by design” present in the plan consists insofar in a change in the planning paradigm. It refers to the idea that through a higher density of quarters or housing units, it is possible to produce affordable housing. On top of that, investors building new housing units in the neighborhoods will have to pay community improvement fees. It has been estimated that these revenues would cover about one half of the amount (300 million dollars) needed for community improvement.

To foster the implementation of the program, three different groups have been formed, which allow actors to mobilize, as well as represent diversified interests. It concerns: a Plan Implementation Team with a focus on infrastructure; an Interagency Plan implementation Committee with a coordination task and an Eastern neighborhoods citizens advisory Committee.

Financing and resources

The project was financed entirely through local government money. Over the span of the program, the total cost could be approximated at roughly US$5m. The ongoing costs in implementing the project are generally recovered through permit and entitlement review fees.

Results and impacts

The legislative and policy frameworks to affect the project are complete and in place. Unfortunately, the timing of the project’s wrap-up coincided with the financial crisis, and as such, development has dramatically slowed and new zoning controls and public benefit provisions have not yet been thoroughly tested. Early indicators point toward success, but the overall scale and intensity of development that the city has seen in recent years has not been adequate to fully assess the success of certain key portions of the project.

Barriers and challenges

Lessons learned and transferability

The extensive public dialogue which is inherent to most political (and all land use) projects in San Francisco made for a more informed but far lengthier planning process. One take-away from this project has been a better understanding of the costs and benefits of extensive public participation of this sort. Specifically, while the plan was made more comprehensive and reflects a broader consensus, many of the original issues which the plan intended to address had fully run their course by the time the plan was adopted. In other words, and in certain respects much of the development which the plan was designed to regulate had already taken place before the plan was actually implemented.

The plan is interesting through the fact that it has been conceived beyond administrative boundaries: it concerns four neighborhoods, characterized by similar socio-economic characteristics and almost same urban structures. The plan has a constraining effect; the administration will have to make its future town-planning permits correspond to its orientations.

The administration mobilizes instruments of different nature in order to implement the plan: regulatory instruments with the zoning and the affordable housing rates; a fiscal instrument with the community fees, an incentive instrument with the density bonus and an informational instrument with public participation. The last instrument in particular helped defining population needs and contributed to a higher acceptance of the plan.